NFT staking is a new way to generate passive income in the Crypto world. It allows NFT holders to lock their assets on DeFi platforms for rewards.
Like DeFi Yield Farming, NFT staking relies on Proof of Stack (PoS) mechanisms to reward participants. By locking NFTs, users can earn rewards based on Annual Percentage Produce (APY) and the number of NFTs.
NFT staking can benefit investors individually as the overall supply decreases. But in a broader context, NFT staking brings new cases of NFTs that are beyond the scope of digital art collection.
This guide will look at what NFT stacking is, how it works, and the best platform for NFT stacking.
When we talk about non-fungible tokens (NFTs), most people think of them as digital representations of pieces of art and collectibles that may increase in value over time. Some NFT projects share a portion of the proceeds with the community of NFT holders. They usually come from secondary market sales and royalties.
But as the NFT market grows, developers, artists, and collectors are looking for new cases to use their NFT collections. One of the latest uses is to use NFTs as utility tokens on stacking platforms. For example, in some gaming Metaverse, NFT collectors may use their NFTs to enhance their game character’s abilities and earn additional rewards.
What Is NFT Staking?
NFT staking refers to locking non-fungi tokens on a platform or protocol in exchange for rewards and other benefits. Staking NFTs allows owners to earn income from their collection while retaining ownership.
In the Crypto world, NFTs are the norm. These are indivisible smart agreements. It is typically based on the Ethereum network, which uses the standard, meaning each token is unique. These cryptographic tokens, such as Cryptocurrencies, are recorded on the Blockchain. It can prove the physical, digital ownership, authenticity, and authenticity of any physical, including artwork, avatar, video files, GIFs, collecting cards, video game assets, and more.
Due to the unique nature of NFTs, investors and depositors generally prefer HODL and speculation. NFT staking provides them with a new opportunity to monetize their assets, potentially attracting as many people as possible and increasing the market demand for stackable NFTs.
Staking NFT is just like staking your Bitcoin (BTC) or Ether (ETH). All you need is a Crypto wallet with NFTs. However, not every NFT can be used to win prizes. Requirements vary from project to project, so it’s best to check out your favorite projects before getting NFTs.
How NFT Staking Works?
The Blockchain protocol locks funds into a staking pool and randomly selects verifiers assigned to verify “mining” or transaction blocks. The more participants commit, the more likely they are to be chosen.
Creating and distributing tokens among the verifiers as prizes, a new block is added. Several factors determine how much a verifier receives as a staking reward, including how many coins the verifier has stained, how long the verifier has been actively at stake, the network, How many coins have been struck, token inflation, and more.
By staking their coins and becoming verifiers, coin holders can use their worthless assets to work for them and generate passive income in exchange for rewards. The Cryptocurrency protocol is also secure and verifies user transactions. It is a victory for all. Consumers who gamble on their coins are still in possession of their assets and are free to remove them from the staking pool at any time, depending on the terms and conditions of the Cryptocurrency protocol.
NFT staking works using the same system, as NFTs are primarily tokenized assets. Users can lock their NFTs on specific platforms to secure and receive rewards based on established Annual Percentage Production (APY) and the number of NFTs.
It is important to note that not every NFT can be used for rewards, unlike Cryptocurrencies. Different projects have different requirements, so check the terms of your selected project before acquiring any NFTs.
XANALIA is the Best Platforms for NFT Staking
From XANALIA Marketplace, you can sell and buy NFTs. Users store their NFTs in XANALIA and insert a composable and fungible token, and these tokens are called vTokens. It can be used for product rewards or to buy specific NFTs from the marketplace.
NFT staking allows participants to make extra money from their useless NFT collection. At the same time, NFT staking is creating new cases of NFTs that have never been discovered before. It may be too early to tell, but we will probably see new opportunities for NFT staking. It is not only for NFT collectors but also in other fields powered by the Play-to-Earn gaming industry and Blockchain technology.